IXONOS PLC INTERIM REPORT 29 OCTOBER 2008 AT 09:30
IXONOS PLC INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2008
IXONOS' TURNOVER GROWS STRONGLY, PROFITABILITY ON EXPECTED LEVEL
- Turnover for the review period was EUR 54.6 million (2007: EUR 41.2 million),
an increase of 32.6 per cent. Organic turnover growth was 19.2 per cent.
- Operating profit was EUR 3.6 million (2007: EUR 3.6 million), 6.5 per cent of
turnover; operating profit decreased 0.8 per cent.
- Net profit was EUR 2.0 million (2007: EUR 2.5 million), 3.6 per cent of
turnover; net profit decreased 22.3 per cent.
- Earnings per share were EUR 0.22 (2007: EUR 0.33).
- Diluted earnings per share were EUR 0.22 (2007: EUR 0.32).
- Turnover of the Consulting Services segment for the review period was EUR 22.9
million (2007: EUR 17.3 million), an increase of 34.9 per cent. Operating
profit was EUR 1.6 million (2007: EUR 1.7 million), 6.8 per cent of turnover;
operating profit decreased 7.4 per cent.
- Turnover of the Software Production Services segment for the review period was
EUR 32.6 million (2007: EUR 24.2 million), an increase of 34.8 per cent.
Operating profit was EUR 4.2 million (2007: EUR 3.7 million), 12.9 per cent
of turnover; operating profit increased 13.4 per cent.
- The Group's turnover for the fourth quarter, as well as for the entire
financial period, is anticipated to significantly exceed the corresponding
turnover for the previous year.
- The Group's operating profit for the fourth quarter is foreseen to exceed the
level of the previous year. As the operating profit percentage for the entire
year is expected to remain at the previous year's level, the operating profit
is presumed to exceed that of last year.
Kari Happonen, President and CEO:
Ixonos' operations achieved their challenging targets during the review period.
The company's turnover increased by more than 30 per cent; organic growth was a
strong 20 per cent. Growth was forceful in both our segments.
In consequence of the rationalization programme that was launched in May, the
company's profitability turned higher already during the second quarter, and
continued to grow throughout the third quarter. The program is aimed at making
the Group's administration and support functions more effective, boosting the
ratio of chargeable work performed by the company's specialist staff, and
increasing the contribution of international offices in proportion to the
service output of the entire Group. The program seeks to achieve approximately
EUR 3 million in yearly savings from the third quarter of the current financial
period.
The internationalization of our business operations continued as planned. Two
new international customer projects in the telecommunications sector were
started in the second quarter, and generated follow-on during the third quarter.
We continued to increase our lower-cost service capacity in Tallinn and Košice;
at the end of the review period, more than 150 experts worked with software
development and quality assurance at these two sites.
According to a survey performed in spring, the company's customer satisfaction
is on the top level of the industry. Once again, our personnel received special
thanks for their skills and their service attitude.
The market situation and the demand for services on the company's main market
areas remained fairly good, despite the global financial crisis that became
acute during the third quarter. The financial crisis is also not expected to
significantly affect the company's outlook for the last part of the year. We
believe that we can continue to grow our business in our chosen customer
industries and with our important customers, outperforming market growth, and
that we will improve our profitability as planned.
FUTURE PROSPECTS
If the global finance crisis and consequent financial uncertainty continue, the
general demand in the ICT industry can be assumed to slow down somewhat, at the
latest during the first half of next year.
The demand for Ixonos' consulting services and software production services is
anticipated to grow faster than the market, both during the final quarter of
this year and for the entire financial period. Thus the company expects to
continue gaining market share.
The Ixonos Group's turnover for the fourth quarter, as well as for the entire
financial period, is anticipated to significantly exceed the corresponding
turnover for the previous year.
The Group's operating profit for the fourth quarter is foreseen to clearly
exceed the level of the previous year. As the operating profit percentage is
expected to remain at the previous year's level, the operating profit is
presumed to exceed that of last year.
BUSINESS OPERATIONS
Ixonos operates in the ICT service market, offering its customers flexible
technology consulting, project management, software development and software
maintenance solutions that support their competitiveness and risk management.
The Group's clientele on the international market comprises leading mobile and
smartphone manufacturers, mobile network suppliers and telecom carriers. Finnish
customers include finance, industry and service sector companies, as well as
public administration organizations.
Consulting Services
Ixonos' consulting services encompass technology consulting, user interface and
usability design, and project management services.
During the review period, growth was particularly strong in the demand for
technology consulting and project management services, as compared to the
previous year.
Software Production Services
Ixonos' software production services include software project deliveries with
total responsibility, as well as software maintenance, testing, and quality
assurance services.
The turnover of the review period, as compared to the previous year, was boosted
especially by project deliveries and software maintenance.
The software project and testing operations actively utilize the offering of the
Group's lower cost offices in Tallinn and Košice.
RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FACTORS
The aim of Ixonos Plc's risk management is to ensure undisturbed continuity and
development of the company's operations, to back up the implementation of the
company's operational targets, and to support growing the company's value. The
risk management organization and process, as well as recognized risks, are
explained on the company's website, at
http://www.ixonos.com/en/investors/risk_management.
Presently, the biggest uncertainty factors relate to the global financial crisis
and its potential ramifications. The general financial uncertainty and the
tightened credit conditions also influence corporate investments and willingness
to invest. The general financial uncertainty may affect the information system
development investments of Ixonos' customers in 2009; investments may be
postponed, or the decisions regarding them may be held over. Nevertheless, the
economic situation is not thought to notably affect Ixonos' mobile terminal and
software product development operations in the beginning first quarter, even if
consumer demand for mobile and smart phones would fall, as has been predicted.
The rapid growth of the company and of its project operations has increased the
company's need for working capital. This increase is being managed through
creating adequate buffers in order to ensure sufficient funds together with the
financiers, and additionally by facilitating the circulation of working capital.
The company's balance sheet also includes a significant amount of goodwill,
which may be impaired should either internal or external factors reduce the
company's expected future profits. Goodwill is tested during the fourth quarter
of the year, and, if necessary, also at other times.
The company has access to the cash funds required by its normal operations. If
the financial market continues to tighten, and the cost of financing rises, this
may affect the company's financing costs from the second quarter of 2009.
During the second quarter, the company launched an operational rationalization
programme aimed at saving approximately EUR 3.0 million per year from the third
quarter of the present financial period. The effects of this retrenchment have
begun to materialize as improved profitability during the second and third
quarters.
TURNOVER
Consolidated turnover was EUR 54.6 million (2007: EUR 41.2 million), or 32.6 per
cent more than in the previous year. Of the turnover, 41 per cent was accrued by
Consulting Services, and 59 per cent by Software Production Services.
TURNOVER BY SEGMENT
--------------------------------------------------------------------------------
| EUR 1,000 | 1-9 2008 | 1-9 2007 | 1-12 2007 |
--------------------------------------------------------------------------------
| Consulting Services | 22,863 | 17,316 | 23,879 |
--------------------------------------------------------------------------------
| Software Production | 32,626 | 24,180 | 35,686 |
| Services | | | |
--------------------------------------------------------------------------------
| Eliminations | - 850 | - 279 | - 337 |
--------------------------------------------------------------------------------
| Group total | 54,639 | 41,217 | 59,228 |
--------------------------------------------------------------------------------
FINANCIAL RESULT
Consolidated operating profit was EUR 3.6 million (2007: EUR 3.6 million);
profit before taxes was EUR 2.7 million (2007: EUR 3.5 million). Profit for the
review period was EUR 2.0 million (2007: EUR 2.5 million), which is 3.6 per cent
of turnover. Diluted earnings per share were EUR 0.22 (2007: EUR 0.32). Diluted
cash flow from business operations was EUR 0.16 per share (2007: EUR 0.12).
OPERATING PROFIT BY SEGMENT
--------------------------------------------------------------------------------
| EUR 1,000 | 1-9 2008 | 1-9 2007 | 1-12 2007 |
--------------------------------------------------------------------------------
| Consulting Services | 1,557 | 1,681 | 2,136 |
--------------------------------------------------------------------------------
| Software Production | 4,198 | 3,702 | 5,030 |
| Services | | | |
--------------------------------------------------------------------------------
| Administration* | - 2,185 | - 1,784 | - 2,487 |
--------------------------------------------------------------------------------
| Group total | 3,570 | 3,599 | 4,679 |
--------------------------------------------------------------------------------
* The administrative costs for the period 1-9 2007 include EUR 0.55 million in
non-recurring expenses for the review period.
RETURN ON CAPITAL INVESTMENT
Consolidated return on equity (ROE) was 11.7 per cent (2007: 25.8). Return on
investment (ROI) was 9.6 per cent (2007: 23.2).
BALANCE SHEET AND FINANCING
The balance sheet total was EUR 61.2 million (2007: EUR 46.8 million).
Shareholders' equity was EUR 23.5 million (2007: EUR 15.3 million). Equity ratio
was 38.4 per cent (2007: 32.7). The Group's liquid assets stood at EUR 1.4
million at the end of the review period (2007: EUR 0.9 million). A contributor
to the smallness of the liquid assets at the end of the review period was the
payment of the final acquisition price instalment for the share capital of
Mermit Business Applications Oy (now Ixonos Technology Consulting Ltd). This
instalment was paid near the end of the review period, mainly in cash. Ixonos
used its overdraft allowance to pay the additional acquisition price, as the
cost of long-term financing at the time of payment, on 15 August 2008, was
considerably higher than that of the overdraft facility which had been agreed
upon in early summer.
GOODWILL
The consolidated balance sheet of 30 September 2009 includes goodwill in the
amount of EUR 32.0 million. This is an increase of EUR 10.9 million during the
review period (31 December 2007: EUR 21.1 million). The changes in the
additional prices for the corporate acquisitions of 2007 have affected the
growth of goodwill. Mermit Business Applications Oy was acquired through a deed
of sale signed on 9 May 2007. The additional acquisition price for Mermit
Business Applications Oy amounted to EUR 3.6 million, most of which was paid in
cash during September. Cidercone Life Cycle Solutions Oy was acquired through a
deed of sale signed in September 2007. The additional acquisition price for
Cidercone Life Cycle Solutions Oy is currently estimated at EUR 9.0 million.
According to the sales contract, the additional acquisition price may be paid as
shares of the parent company, in cash, or as a combination of the two. The
acquisition price has been recorded in the balance sheet as short-term debt. The
increase in purchase price debt caused a EUR 0.3 million financing cost entry,
in accordance with IFRS regulations, for the third quarter. This entry is not
related to interest expenses for the company's external financing. The company's
result for the fourth quarter will be burdened with a similar interest expense
of EUR 0.3 million.
CASH FLOW
Consolidated cash flow from business operations for the review period was EUR
1.5 million (2007: EUR 0.9 million). The increase in cash flow from business
operations was mainly due to the Group's increased earnings before interest,
taxes, depreciation and amortization (EBITDA).
PERSONNEL
The number of personnel averaged 928 (2007: 684) during the review period, and
was 918 (2007: 812) at the end of the period. Cooperation negotiations were
started in the Group's units in Finland on 6 May 2008. They were completed on 3
June 2008. On a Group level, the negotiations resulted in the termination of 32
employees, and in 7 temporary lay-offs.
SHARES AND SHARE CAPITAL
Share turnover and price
During the review period, the highest price of the company's share was EUR 6.15
(2007: EUR 8.08), and the lowest EUR 3.49 (2007: EUR 4.55). The closing price on
30 September 2008 was EUR 3.90 (2007: EUR 6.42). The trade volume weighted
average price during the review period was EUR 4.33 (2007: EUR 5.85). The number
of shares traded during the review period was 3,385,768 (2007: 4,969,692), which
corresponds to 37.4 per cent (2007: 62) of the total number of shares at the end
of the review period. The market value of the company's shares, according to the
closing price on 30 September 2008, was EUR 35,290,652 (2007: EUR 51,595,165).
Share capital
At the beginning of the year 2008, the company's registered share capital was
EUR 355,485.20; the number of shares was 8,887,130. During the year 2008, 10,000
company shares have been subscribed for with option rights of the 2002 stock
options plan II/C1, 14,000 shares with option rights of the options plan II/D1,
and 17,000 shares with option rights of the option plan II/D2. Additionally,
8,500 shares have been subscribed for with option rights of the 2006 stock
options plan AI.
During the review period, a directed issue of 126,255 shares was made as part of
the additional acquisition price for the share capital of Service 4 Mobile Oy
(now Ixonos Project Management Ltd). The share issue was announced in a stock
exchange release on 9 June 2008. The subscription price was EUR 4.83 per share.
Ixonos' share capital was EUR 361,955.40 at the end of the review period; the
total number of shares was 9,048,885.
On 12 September 2008, the company executed a directed share issue of 204,204
shares as part of the additional acquisition price for Mermit Business
Applications Oy (now Ixonos Technology Consulting Ltd). The share issue was
subscribed for in full. At the end of the review period, the payments related to
the share issue had been entered in the share issue account of shareholders'
equity. The subscription price was EUR 4.07 per share.
Stock option plans II (2002) and III (2006)
Under the 2002 stock options plan, 10,000 options have been released under AI,
10,000 options under AII, 82,500 options under BI, 22,500 options under BII,
100,000 options under CI, 35,000 options under CII, 127,500 options under DI,
and 112,500 options under DII. Under the 2002 options plan, 45,000 shares have
been subscribed for with options BI, 5,000 shares with options BII, 23,500
shares with options CI, 25,500 shares with options CII, 64,500 shares with
options DI, and 15,500 shares with options DII. At the end of the review period,
the maximum number of shares that can be subscribed for with outstanding options
under options plan 2002 is 321,000, which is 3.5 per cent of the company's total
shares. The subscription price is EUR 1.88 for AI and AII options, EUR 1.56 for
BI and BII options, EUR 3.32 for CI and CII options, and EUR 3.22 for DI and DII
options. The subscription period for the 2002 options ends on 31 December 2008.
Under the 2006 stock options plan, 140,000 options have been released under AI,
140,000 options have been released under AII, and 60,000 options have been
released under BI. Of the series A options, 15,000 AI options and 15,000 AII
options have been returned to the company based on the terms of the options.
These options have been converted to series B options in accordance with the
option terms, and they have been redistributed. The maximum number of shares
that can be subscribed for with outstanding options under options plan 2006 is
391,500, which is 4.3 per cent of the company's total shares. The subscription
period for the 2006 AI options began on 1 October 2007. The subscription period
for the AII and BI options begins on 1 October 2008, and for the BII options, on
1 October 2009. The subscription price is EUR 4.13 for AI and AII options and
EUR 5.10 for BI and BII options. The subscription period for the 2006 options
ends on 31 December 2011.
Shareholders
There were 2,856 shareholders on 30 September 2008. Private persons owned 57 per
cent of the company's shares, while institutions owned 43 per cent. Foreign
ownership was 3 per cent of the total number of shares.
Board authorizations
On 3 April 2008, the Annual General Meeting authorized the Board to decide on
issuing up to 890,000 shares in one or more issues. The Board may decide to
issue either new shares, or existing shares possibly held by the company. The
maximum of the authorization is equivalent to approximately 10 per cent of all
company shares. The authorization may be used to finance or implement corporate
acquisitions or other arrangements, or for other purposes decided by the Board.
The authorization entitles the Board to decide on all terms and conditions of
the share issue, including the recipients of shares as well as the compensation
to be paid. Thus, the authorization also includes the right to directed share
issues, i.e. to deviate from the shareholders' pre-emptive right, under
conditions defined by law. The authorization is effective until the next Annual
General Meeting, although not beyond 30 June 2009.
The Board has used the above authorization in the share issue of 330,459 shares.
Thus, an authorization of 559,541 shares remains.
ANNUAL GENERAL MEETING DECISIONS
The Annual General Meeting of Ixonos Plc, held on 3 April 2008, adopted the
company's financial statements, including the consolidated financial statements,
for the financial period 1 January - 31 December 2007, and granted discharge
from liability to the Members of the Board of Directors and to the CEO.
The Annual General Meeting decided to distribute as dividend EUR 0.18 per share.
The dividend was paid on 16 April 2008 on the shares that were, on the balance
date 8 April 2008, registered on the shareholder list maintained by the Finnish
Central Securities Depository Ltd.
The Annual General Meeting confirmed the number of Board members to be six.
Members of the Board Eero Hurme, Matti Järvinen, Tero Laaksonen, Matti Makkonen
and Esko Siik were re-elected; Markku Toivanen was elected as new member. The
Annual General Meeting elected Paul Ehrnrooth and Staffan Sevon as shareholders'
representatives on the Nomination Committee.
According to the decision of the Annual General Meeting, KHT firm
PricewaterhouseCoopers Oy will continue as auditor, with Heikki Lassila, KHT
auditor, as principal auditor.
The Annual General Meeting decided to reduce the premium fund, according to the
balance sheet of 31 December 2007, with EUR 4,511,774.54. The reduction has been
transferred to the invested non-restricted equity fund. Before the premium fund
was reduced, a public notice was issued in accordance with the Limited Liability
Companies Act.
The Annual General Meeting also made the above-mentioned decision of authorizing
the Board to decide on issuing up to 890,000 shares in one or more issues.
At its meeting following the Annual General Meeting, the Board of Directors
elected Tero Laaksonen Chairman of the Board, and Eero Hurme Deputy Chairman of
the Board.
EVENTS AFTER THE REVIEW PERIOD
On 3 October 2008, the company published a stock exchange release stating that
the additional acquisition price that was related to the acquisition of Mermit
Business Applications Oy (now Ixonos Technology Consulting Ltd), and tied to the
development of the turnover and result of Ixonos Technology Consulting Ltd
between 1 June 2007 and 31 May 2008, had been paid partly in cash, and partly
with new Ixonos Plc shares.
To pay the share consideration, and based on the authorization of the Annual
General Meeting on 3 April 2008, the Board of Directors of Ixonos Plc decided on
12 September 2008 to execute a directed share issue of 204,204 new Ixonos Plc
shares to some of the former owners of Ixonos Technology Consulting Ltd, for a
subscription price of EUR 4.07 per share. The share subscription price was based
on the terms of the share acquisition contract, and corresponds to the trade
volume weighted average price of the Ixonos Plc share on OMX Nordic Exchange
Helsinki between 1 March 2008 and 31 May 2008. The main part of the additional
acquisition price was paid in cash. The new shares subscribed for in the
directed share issue, as well as the share capital increase, were entered into
the Finnish Trade Register on 3 October 2008. The new shares confer full
shareholder rights. After the increase, the share capital of Ixonos Plc is EUR
370,123.56; the number of shares is 9,253,089.
NEXT REPORTS
The financial statement bulletin for the period 1 January - 31 December 2008
will be published on Wednesday, 11 February 2009.
IXONOS PLC
Board of Directors
FURTHER INFORMATION IS AVAILABLE FROM:
Ixonos Plc
Kari Happonen, President and CEO, telephone +358 424 2231, mobile +358 400 700
761, kari.happonen@ixonos.com
Timo Leinonen, CFO, telephone +358 424 2231, mobile +358 400 793 073,
timo.leinonen@ixonos.com
DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
IXONOS GROUP
ABBREVIATED FINANCIAL STATEMENTS 1 JANUARY - 30 SEPTEMBER 2008
Accounting principles
This financial statement bulletin has been prepared in accordance with the
standard IAS 34 (Interim Financial Reporting) as well as the accounting
principles for the financial reports of 31 December 2007. The interim report has
been prepared in compliance with the IFRS standards and interpretations approved
in the European Union. Forthcoming changes are presented within the accounting
principles in the annual report for 2007. Income tax expense is founded on the
performance-based taxes corresponding to the result for the review period.
Preparing the financial statements in accordance with the IFRS standards compels
Ixonos' management to use estimates and assumptions that influence the amounts
of assets and liabilities at the time of preparing the balance sheet as well as
the amounts of income and expense for the financial period. In addition, the
principles for preparing financial statements must be applied with
consideration. Actual results may differ from the estimates and assumptions
made.
The interim report is unaudited.
The figures in the income statement and balance sheet have been consolidated.
All group companies are included in the consolidated balance sheet. The original
interim report is in Finnish. The interim report in English is a translation.
CONSOLIDATED PROFIT AND LOSS ACCOUNT, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | Change | 1.7.- | 1.7.- | 1.1.- |
| | 30.9.08 | 30.9.07 | % | 30.9.08 | 30.9.07 | 31.12.07|
| | | | | | | |
--------------------------------------------------------------------------------
| Turnover | 54,640 | 41,217 | 32.6 | 16,651 | 13,868 | 59,229 |
--------------------------------------------------------------------------------
| Operating | - 51,070 | - 37,619 | 35.8 | - 15,318 | - 12,589 |- 54,550 |
| costs | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | 3,570 | 3,599 | - 0.8 | 1,333 | 1,280 | 4,679 |
| PROFIT | | | | | | |
--------------------------------------------------------------------------------
| Financial | - 885 | - 130 | 580.0 | - 367 | - 28 | - 303 |
| income and | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 2,685 | 3,468 | - 22.6 | 966 | 1,252 | 4,376 |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| Income taxes | - 717 | - 936 | - 23.4 | - 304 | - 345 | - 1,229 |
--------------------------------------------------------------------------------
| NET PROFIT | 1,968 | 2,533 | - 22.3 | 662 | 906 | 3,147 |
| FOR THE | | | | | | |
| PERIOD | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, K EURO
--------------------------------------------------------------------------------
| ASSETS | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| FIXED ASSETS | | | |
--------------------------------------------------------------------------------
| Goodwill | 31,992 | 22,848 | 21,067 |
--------------------------------------------------------------------------------
| Intangible assets | 7,143 | 6,258 | 6,282 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1,842 | 1,245 | 1,332 |
--------------------------------------------------------------------------------
| Deferred tax claims | 113 | 110 | 43 |
--------------------------------------------------------------------------------
| Other assets | 110 | 19 | 110 |
--------------------------------------------------------------------------------
| Receivables | 0 | 0 | 12 |
--------------------------------------------------------------------------------
| FIXED ASSETS TOTAL | 41,200 | 30,501 | 28,846 |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Accounts receivable and other | 18,599 | 15,164 | 15,411 |
| receivables | | | |
--------------------------------------------------------------------------------
| Financial assets | 8 | 150 | 151 |
--------------------------------------------------------------------------------
| Liquid assets | 1,355 | 940 | 2,331 |
--------------------------------------------------------------------------------
| CURRENT ASSETS TOTAL | 19,962 | 16,253 | 17,893 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 61,162 | 46,754 | 46,740 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | | | |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital | 362 | 321 | 355 |
--------------------------------------------------------------------------------
| Premium fund | 121 | 4,510 | 4,512 |
--------------------------------------------------------------------------------
| Share issue | 831 | 2 | 77 |
--------------------------------------------------------------------------------
| Invested non-restricted equity | 13,985 | 3,345 | 8,869 |
| fund | | | |
--------------------------------------------------------------------------------
| Retained earnings | 6,229 | 4,555 | 4,588 |
--------------------------------------------------------------------------------
| Net profit for the period | 1,968 | 2,533 | 3,147 |
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY TOTAL | 23,498 | 15,266 | 21,548 |
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Long-term liabilities | 7,652 | 12,732 | 8,681 |
--------------------------------------------------------------------------------
| Current liabilities | 30,012 | 18,756 | 16,511 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 37,664 | 31,488 | 25,192 |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | 61,162 | 46,754 | 46,740 |
| LIABILITIES TOTAL | | | |
--------------------------------------------------------------------------------
CHANGES IN EQUITY, K EURO
--------------------------------------------------------------------------------
| 1.1.2007 | Share |Premium | Share | Invested | Retained | Total |
| | capital| fund | issue | non-rest | earnings | |
| | | | | ricted | | |
| | | | | equity | | |
| | | | | fund | | |
--------------------------------------------------------------------------------
| Shareholders' | 297 | 4,176 | 0 | 0 | 6,406 | 10,879 |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 154 | 154 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 25 | 334 | 2 | 3,345 | | 3,705 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 2,004 | - 2,004 |
--------------------------------------------------------------------------------
| Profit for | | | | | 2,532 | 2,533 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 321 | 4,510 | 2 | 3,345 | 7,088 | 15,266 |
| equity | | | | | | |
| 30.9.2007 | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 355 | 4,512 | 77 | 8,869 | 7,734 | 21,548 |
| equity | | | | | | |
| 1.1.2008 | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 98 | 98 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Transfer from | | - | | 4,512 | | 0 |
| the premium | | 4,512 | | | | |
| fund to the | | | | | | |
| invested | | | | | | |
| non-restricted| | | | | | |
| equity fund | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 6 | 121 | 754 | 605 | | 1,486 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 1,604 | - 1,604 |
--------------------------------------------------------------------------------
| Profit for | | | | | 1,968 | 1,968 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 361 | 121 | 831 | 13,985 | 8,199 | 23,498 |
| equity | | | | | | |
| 30.9.2008 | | | | | | |
--------------------------------------------------------------------------------
SOURCES AND APPLICATION OF FUNDS, GROUP, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Cash flow from business operations | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 1,969 | 2,533 | 3,147 |
--------------------------------------------------------------------------------
| Adjustments to cash flow from | | | |
| business operations | | | |
--------------------------------------------------------------------------------
| Taxes | 717 | 936 | 1,229 |
--------------------------------------------------------------------------------
| Depreciation and impairment | 1,577 | 600 | 1,226 |
--------------------------------------------------------------------------------
| Financial income and expenses | 885 | 130 | 303 |
--------------------------------------------------------------------------------
| Other adjustments | 98 | 105 | 105 |
--------------------------------------------------------------------------------
| Income financing before change in | 5,245 | 4,304 | 6,010 |
| net working capital | | | |
--------------------------------------------------------------------------------
| Change in net working capital | - 2,599 | - 2,637 | - 1,077 |
--------------------------------------------------------------------------------
| Interest received | 102 | 36 | 68 |
--------------------------------------------------------------------------------
| Interest paid | - 445 | - 192 | - 332 |
--------------------------------------------------------------------------------
| Transfer income from fixed assets | - 7 | 0 | 0 |
--------------------------------------------------------------------------------
| Taxes paid | - 797 | - 565 | - 1,297 |
--------------------------------------------------------------------------------
| Net cash flow from business | 1,498 | 946 | 3,371 |
| operations | | | |
--------------------------------------------------------------------------------
| Cash flow from investments | | | |
--------------------------------------------------------------------------------
| Investments in tangible and | - 950 | - 612 | - 1,357 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Change in financial assets | 143 | 545 | 544 |
--------------------------------------------------------------------------------
| Transfer income from fixed assets | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | - 3,100 | - 4,136 | - 4,136 |
--------------------------------------------------------------------------------
| Net cash flow from investments | - 3,907 | - 4,202 | - 4,949 |
--------------------------------------------------------------------------------
| Net cash flow before financing | - 2,410 | - 3,256 | - 1,578 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Dividend paid | - 1,604 | - 2,004 | - 2,004 |
--------------------------------------------------------------------------------
| Increase in short-term loans | 3,478 | 0 | 0 |
--------------------------------------------------------------------------------
| Short-term loan receivables decrease | | 14 | |
--------------------------------------------------------------------------------
| Increase in long-term loans | 464 | 3,800 | 3,800 |
--------------------------------------------------------------------------------
| Repayment of long-term loans | - 950 | - 643 | - 993 |
--------------------------------------------------------------------------------
| Share issue | 46 | 340 | 417 |
--------------------------------------------------------------------------------
| Net cash flow from financing | 1,434 | 1,507 | 1,220 |
| activities | | | |
--------------------------------------------------------------------------------
| Change in funds | - 976 | - 1,750 | - 359 |
--------------------------------------------------------------------------------
| Liquid assets at start of period | 2,331 | 2,689 | 2,689 |
--------------------------------------------------------------------------------
| Liquid assets at end of period | 1,355 | 940 | 2,331 |
--------------------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS ACCOUNT, QUARTERLY, K EURO
--------------------------------------------------------------------------------
| | Q3/2008 | Q2/2008 | Q1/2008 | Q4/2007 | Q3/2007 |
| | 1.7.08- | 1.4.08- | 1.1.08- | 1.10.07- | 1.7.07- |
| | 30.9.08 | 30.6.08 | 30.3.08 | 31.12.07 | 30.9.07 |
--------------------------------------------------------------------------------
| Turnover | 16,651 | 19,721 | 18,268 | 18,011 | 13,868
|
| | | | | | |
--------------------------------------------------------------------------------
| Operating costs | - 15,318 | - 18,145 | - 17,607 | - 16,931 | - 12,589 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 1,333 | 1,576 | 661 | 1,080 | 1,280 |
--------------------------------------------------------------------------------
| Financing income | - 367 | - 355 | - 162 | - 173 | - 28 |
| and expenses | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 966 | 1,221 | 499 | 908 | 1,252 |
--------------------------------------------------------------------------------
| Income taxes | - 304 | - 282 | - 130 | - 294 | - 345 |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 662 | 938 | 369 | 614 | 906 |
| PERIOD | | | | | |
--------------------------------------------------------------------------------
SEGMENT REPORT
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Turnover by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 22,863 | 17,316 | 23,879 |
--------------------------------------------------------------------------------
| Software Production Services | 32,626 | 24,180 | 35,686 |
--------------------------------------------------------------------------------
| Eliminations | - 850 | - 279 | - 337 |
--------------------------------------------------------------------------------
| Turnover total | 54,639 | 41,217 | 59,228 |
--------------------------------------------------------------------------------
| Operating profit by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 1,557 | 1,681 | 2,136 |
--------------------------------------------------------------------------------
| Software Production Services | 4,198 | 3,708 | 5,030 |
--------------------------------------------------------------------------------
| Administration | - 2,185 | - 1,790 | - 2,487 |
--------------------------------------------------------------------------------
| Total operating profit | 3,570 | 3,599 | 4,679 |
--------------------------------------------------------------------------------
| Operating profit, per cent of | 6.5 | 8.7 | 7.9 |
| turnover | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | - 885 | - 130 | - 303 |
--------------------------------------------------------------------------------
| Profit before taxes | 2,685 | 3,468 | 4,376 |
--------------------------------------------------------------------------------
| Taxes | - 717 | - 936 | - 1,229 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 1,968 | 2,533 | 3,147 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 17,861 | 14,006 | 15,381 |
--------------------------------------------------------------------------------
| Software Production Services | 39,780 | 32,151 | 29,683 |
--------------------------------------------------------------------------------
| Other | 3,520 | 596 | 1,675 |
--------------------------------------------------------------------------------
| Total assets | 61,162 | 46,754 | 46,740 |
--------------------------------------------------------------------------------
| Liabilities by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 4,060 | 5,096 | 5,486 |
--------------------------------------------------------------------------------
| Software Production Services | 23,652 | 23,067 | 15,899 |
--------------------------------------------------------------------------------
| Other | 9,952 | 3,325 | 3,807 |
--------------------------------------------------------------------------------
| Total liabilities | 37,664 | 31,488 | 25,192 |
--------------------------------------------------------------------------------
| Depreciation by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 278 | 299 | 394 |
--------------------------------------------------------------------------------
| Software Production Services | 1,279 | 298 | 696 |
--------------------------------------------------------------------------------
| Other | 20 | 3 | 135 |
--------------------------------------------------------------------------------
| Total depreciation | 1,577 | 600 | 1,226 |
--------------------------------------------------------------------------------
| Investments per segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 2,411 | 3,385 | 4,807 |
--------------------------------------------------------------------------------
| Software Production Services | 12,457 | 13,433 | 10,758 |
--------------------------------------------------------------------------------
| Administration | 41 | 3 | 201 |
--------------------------------------------------------------------------------
| Investments total | 14,909 | 16,821 | 15,766 |
--------------------------------------------------------------------------------
CHANGES IN FIXED ASSETS, K EURO
--------------------------------------------------------------------------------
| | Goodwill| Intangible | Property, | Other | Total |
| | | fixed | plant and | tangible| |
| | | assets | equipment | assets | |
| | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 11,190 | 450 | 309 | 110 | 12,059 |
| 1.1.2007 | | | | | |
--------------------------------------------------------------------------------
| Additions | | 346 | 274 | | 620 |
--------------------------------------------------------------------------------
| Additions from | 11,658 | 5,935 | 789 | | 18,382 |
| corporate | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Disposals | | | | | |
--------------------------------------------------------------------------------
| Depreciation during | | - 474 | - 126 | | - 600 |
| the financial period | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 22,848 | 6,258 | 1,245 | 110 | 30,461 |
| 30.9.2007 | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 21,067 | 6,282 | 1,332 | 110 | 28,791 |
| 1.1.2008 | | | | | |
--------------------------------------------------------------------------------
| Additions | 10,925 | 2,274 | 1,186 | | 14,386 |
--------------------------------------------------------------------------------
| Additions from | | | | | |
| corporate | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Disposals | | - 106 | - 407 | | - 513 |
--------------------------------------------------------------------------------
| Depreciation during | | - 1,307 | - 270 | | - 1,577 |
| the financial period | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 31,992 | 7,143 | 1,842 | 110 | 41,087 |
| 30.9.2008 | | | | | |
--------------------------------------------------------------------------------
FINANCIAL RATIOS
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Earnings per share, EUR diluted | 0.22 | 0.32 | 0.40 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.22 | 0.33 | 0.41 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 2.60 | 2.02 | 2.42 |
--------------------------------------------------------------------------------
| Operating cash flow per share, EUR | 0.16 | 0.12 | 0.43 |
| diluted | | | |
--------------------------------------------------------------------------------
| Return on investment, per cent | 9.6 | 23.2 | 19.4 |
--------------------------------------------------------------------------------
| Return on equity, per cent | 11.7 | 25.8 | 19.4 |
--------------------------------------------------------------------------------
| Operating profit/turnover, per | 6.5 | 8.7 | 7.9 |
| cent | | | |
--------------------------------------------------------------------------------
| Net gearing | 79.0 | 48.8 | 33.8 |
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| PERSONNEL | 928 | 684 | 726 |
| Average number of personnel | | | |
--------------------------------------------------------------------------------
| Personnel at the end of the period | 918 | 812 | 874 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS, K EUR | 30.9.2008 | 30.9.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Collateral for own commitments | | | |
--------------------------------------------------------------------------------
| Corporate mortgages | 9,800 | 9,800 | 9,800 |
--------------------------------------------------------------------------------
| Other collateral | 369 | 280 | 273 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing and other rental | | | |
| commitments | | | |
--------------------------------------------------------------------------------
| Falling due within 1 year | 3,383 | 667 | 3,559 |
--------------------------------------------------------------------------------
| Falling due within 1-5 years | 7,484 | 2,132 | 7,623 |
--------------------------------------------------------------------------------
| Falling due after 5 years | 0 | 0 | 616 |
--------------------------------------------------------------------------------
| Total | 10,867 | 2,799 | 11,798 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal value of interest rate | | | |
| swap agreement | | | |
--------------------------------------------------------------------------------
| Falling due within 1 year | 1,400 | 1,400 | 1,400 |
--------------------------------------------------------------------------------
| Falling due within 1-5 years | 1,450 | 2,800 | 2,450 |
--------------------------------------------------------------------------------
| Falling due after 5 years | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | 3,150 | 4,200 | 3,850 |
--------------------------------------------------------------------------------
| Fair value | | | 26 |
--------------------------------------------------------------------------------
CALCULATION OF FINANCIAL RATIOS
Return on equity (ROE) = 100 x net profit / shareholders' equity (average)
Return on investment (ROI) =
100 x (profit before taxes + interest + other financial expenses) /
balance sheet total - non-interest bearing liabilities (average)
Diluted result per share = net profit / diluted number of shares
Shareholders' equity per share = shareholders' equity / share-issue adjusted
number of shares